DAX 40, copper price stabilise while AUD/USD rallies
Technical analysis of the DAX 40, copper price and AUD/USD as the former try to find interim support while the latter rallies towards its 1 ¼ year high.
Macro update
Wall Street sell-off:
US equities fell sharply after the MLK holiday, with the S&P 500 down 2.0%, the Nasdaq 100 off 2.4% and the Dow Jones lower by 1.8%, marking the worst one-day decline in around three months.
Tariff escalation fears:
Markets were unsettled by President Trump’s threat of new tariffs on European countries linked to demands over Greenland, reviving memories of April’s trade shock and raising concerns over renewed policy-driven volatility.
Risk-off rotation:
Gold surged to fresh record highs above $4800 an ounce as investors sought safety, while global equities fell and the VIX volatility index jumped to a two-month high.
Bond market strain:
United States (US) Treasuries sold off, led by the long end of the curve, amid spillover from a sharp rout in Japanese government bonds driven by fiscal concerns and the risk of snap elections.
“Sell America” narrative:
The US dollar posted its largest daily fall in over a month, while reports of overseas investors cutting US asset exposure added pressure across equities, bonds and forex.
Netflix earnings and outlook:
Netflix beat fourth quarter (Q4) revenue and earnings per share (EPS) expectations and raised near-term guidance, but shares still fell in after-hours trading.
DAX 40 finds interim support in the 24,600 region
The DAX 40's swift sell-off from last week's 25,507 record high has so far taken it to Tuesday's low at 24,507, made marginally above its 24,474 mid-December high. Together with the mid-November high at 24,441 these level may offer support. If not, the late October highs at 24,384 - 24,348 may be reached.
Immediate resistance sits in the 24,800 region.
Short-term outlook:
Bearish while below Monday's 25,070 high.
Medium-term outlook:
Bullish while above the 18 December low at 23,924.
DAX 40 daily candlestick chart
AUD/USD nears 1 1/4 year high
AUD/USD has resumed its ascent towards its $0.6766 early January peak - a level last traded in October 2024 - having found support above its $0.6660 late December low. While it underpins, the July 2024 high at $0.6798 should remain in sight.
Minor support above the $0.6664 - $0.6660 region may be spotted between the late December and mid-January highs at $0.6732 - $0.6727.
Short-term outlook:
Bullish while above $0.6660, targeting the $0.6800 region.
Medium-term outlook:
Bullish while above $0.6593, targeting the July 2023 high at $0.6895.
AUD/USD daily candlestick chart
Copper retracement peters out
The copper price slid from last week's $6.1543 high to Tuesday's $5.7438 low, above which it now range trades.
While the next lower 8 January low at $5.6978 holds, the medium-term uptrend is deemed to be intact with the $6.1123 - $6.1543 resistance zone remaining in focus. If overcome, the $6.5000 region may also be reached.
A fall through $5.6978 may push the mid-December highs and late December low at $5.5413 - $5.4930 to the fore.
Short-term outlook:
Bullish, targeting the $6.5000 region while above $5.6978.
Medium-term outlook:
Bullish; eyes $6.5000 and potentially the $7.0000 region while trading above the 29 December low at $5.5413.
Copper daily candlestick chart
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